A Modern Application Portfolio Makes CIOs Agents of Change

No matter what industry a company is in and whatever the size of its operations, chances are it is looking for ways to enable IT to better address the ever-changing needs of management, end users, customers and partners — all while continuing to innovate and invest in strategic priorities.

The reality is, time and financial constraints are forcing many CIOs to make difficult choices when it comes to meeting business needs. One strategy that’s taking hold at enterprises is to build an agile IT environment—one that’s able to support the rapid pace of business change—and the way to do that is to modernize the application portfolio and platform.

“By modernizing applications, by definition you are moving them through various methods such as rewriting, rehosting or replacing in order to run on the modern platform,” says Scott Rosenbloom, platform modernization specialist at Microsoft.

“What makes these platforms ‘modern’ is the use of frameworks, rules engines, OO [object-oriented] technologies and service-oriented architectures, among other elements that make it easier to modify applications once deployed,” Rosenbloom says. “Also, many functions of legacy applications were typically done in code because that was all that was available. Today, many of these functions are replaced by built-in functionality.”

For example, historically, many programs were written whose sole task was to generate reports. “Today, on SQL Server, that work can be done declaratively, and further, end users can customize the reports themselves — saving huge IT backlogs and making the information more relevant for that user’s purpose,” Rosenbloom says.

Another example is workflow. “In many organizations, approvals must flow through an organization, such as a purchase order or expense report,” Rosenbloom says. “Historically, this would all be captured in code. If a change had to be made to the workflow, [for example, if a new regulation required purchase orders over $1,000 to be signed off by a vice president], you would have to write additional code.”

Today, that can be done more efficiently through tools such as SharePoint or BizTalk, and as a result companies are able to react quickly to changing requirements.

One company that’s launched a modernization effort and is reaping the benefits is Owens & Minor Inc., a Richmond, Va., distributor of medical and surgical supplies and a health care supply-chain management company.

In 2009, the company began moving its enterprise resource planning (ERP) platform off an aging IBM mainframe environment to a Windows Server and SQL Server platform. The older platform was running out of capacity, and was inflexible and costly to run. It would take the company weeks to write and run custom reports, and months to implement software updates, limiting its ability to respond to fast-changing business needs.

To move business applications to a more modern, cost-effective platform, Owens & Minor elected to migrate — rather than replace or rewrite — its custom code to the Windows Server 2008 environment, says Rick Mears, senior vice president and CIO at Owens & Minor.

“We are not unlike many companies that are looking to build new, relevant businesses, products and services to further support our existing and new customers,” and an IT update supports that, Mears says.

By moving the mainframe applications to the Windows Server 2008 operating system, Microsoft SQL Server 2008 data management software and server-based hardware, the company created a much more cost-effective computing platform that provided agility and the ability to adapt to changing requirements.

With the savings in operating expenses made possible by the move, Owens & Minor was able to invest in other IT endeavors to improve the business and further enhance its IT environment, Mears says. These include a master data management system to generate more consistent information about customers; and e-commerce Web portals for customers and suppliers, which enhance the company’s supply chain visibility.

Most modernization projects will include several elements: including retire, retain, replace, rehost and rewrite, Rosenbloom says. “They are not necessarily a process, flowing one to the next, but are options a customer can take to modernize its environment,” he says.

A company might use several of these approaches in parallel or in succession. “For example, [the company] might rehost the application to derive quick savings on total cost of ownership and then reinvest those savings into rewriting the application over time to better serve its needs,” Rosenbloom says.

Through modernization of the application portfolio, CIOs can become agents of change for their organizations.

“By doing a thorough job of managing their application portfolio, they will finally have the visibility they need to perform strategic planning,” Rosenbloom says.Many organizations have multiple ERP systems, reporting systems, etc., because new solutions are added in silos without a cross-enterprise perspective, Rosenbloom says. “Once you have that, it is far easier to determine priorities and limit redundancies — all with an eye on understanding what applications within your infrastructure provide the most value and therefore can have the most impact on a modernization strategy,” he says.